Tuesday, March 19, 2008 • City regains control of golf course

Publisher’s note: This story originally appeared in the Tuesday, March 19, 2008 edition of the Lassen County Times.

The city of Susanville is back in the golf course business as both the owner and operator of the Diamond Mountain Golf Club.

The Susanville City Council announced it approved a settlement agreement with Plumas Bank, the lender that financed the expansion of the golf course from nine to 18 holes, following a closed session held on Tuesday, March 11.

According to the staff report regarding the agreement, the city will borrow $450,000 “to fund the settlement, pay related expenses and provide working capital to begin operating the golf course. The loan is secured by golf course assets and will be repaid with future revenues from the golf course.”

Plumas Bank will receive $350,000 when the loan closes, leaving the city with $100,000 to operate the golf course.

In exchange, Plumas Bank “relinquishes all rights to the leasehold interest, personal property and trade fixtures” and the city will “regain the full complete and exclusive right to own, operate and manage the golf course,” according to the staff report on the agreement presented to the council.

City Administrator Rob Hill said the city will not have to spend any general fund money to operate the golf course and will not have to begin repaying the loan for three years.

Hill also said the settlement had nothing to do with Sickles Golf Associates, Inc., a private corporation that signed a long-term lease agreement with the city to operate the golf course.

“Plumas Bank had previously acquired all rights to the lease and property from Sickles Golf Associates,” the staff report read. “SGA is not a party to this agreement and has not negotiated with or received any compensation from the city.”

“Essentially, the city has acquired the additional nine holes and related improvements at an extremely discounted price, although not in a manner that was ever foreseen or desired,” the staff report read.

The city had explored the possibility of expanding the golf course, formerly known as the Emerson Lake Golf Course, for many years.

In the late 1990s, the estimated cost of the project was $2 to $4 million.

“This was not feasible based on projected revenues,” the staff report read. “The only viable option for the city was to allow the private sector to expand and operate the course. Unfortunately, this proved over time to also not be feasible.

Hill said the city had not made any decisions on how the city will operate the golf course, but he does expect it will open for business sometime this spring.

Controversy regarding the city-owned 18-hole golf course operated by SGA erupted in October 2006 when stakeholder Frank Cady asked the city council to renegotiate the lease for the facility to help the financially strapped company make a profit.